Does diversification lead to better loan portfolio returns? Empirical evidence from Indonesian banks
The composition of the loan portfolios of Indonesian banks are analysed in this study to determine whether loan diversification or loan focus strategies lead to better loan portfolio returns. This study is based on secondary data obtained from the Indonesian Banking Directory of the Indonesian Centr...
| Main Authors: | , |
|---|---|
| Format: | Journal Article |
| Published: |
De La Salle University Press
2017
|
| Online Access: | http://hdl.handle.net/20.500.11937/54310 |
| _version_ | 1848759340142428160 |
|---|---|
| author | Atahau, A. Cronje, Tom |
| author_facet | Atahau, A. Cronje, Tom |
| author_sort | Atahau, A. |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | The composition of the loan portfolios of Indonesian banks are analysed in this study to determine whether loan diversification or loan focus strategies lead to better loan portfolio returns. This study is based on secondary data obtained from the Indonesian Banking Directory of the Indonesian Central Bank, as well as commercial bank annual reports provided by Infobank magazine and the Indonesian Banking Development Institute. Data pertaining to 109 commercial banks for the period 2003 to 2011 were analysed using non-parametric testing of means and panel data regression. The research findings indicate that the loan portfolios of government-owned, domestic-owned, and foreign-owned banks in Indonesia differ in terms of the extent of their diversification to different economic sectors. Furthermore, a significant positive relationship exists between economic sector loan diversification and loan portfolio returns. However, similar results were not found for loan type diversification. |
| first_indexed | 2025-11-14T09:58:19Z |
| format | Journal Article |
| id | curtin-20.500.11937-54310 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T09:58:19Z |
| publishDate | 2017 |
| publisher | De La Salle University Press |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-543102017-10-30T06:26:46Z Does diversification lead to better loan portfolio returns? Empirical evidence from Indonesian banks Atahau, A. Cronje, Tom The composition of the loan portfolios of Indonesian banks are analysed in this study to determine whether loan diversification or loan focus strategies lead to better loan portfolio returns. This study is based on secondary data obtained from the Indonesian Banking Directory of the Indonesian Central Bank, as well as commercial bank annual reports provided by Infobank magazine and the Indonesian Banking Development Institute. Data pertaining to 109 commercial banks for the period 2003 to 2011 were analysed using non-parametric testing of means and panel data regression. The research findings indicate that the loan portfolios of government-owned, domestic-owned, and foreign-owned banks in Indonesia differ in terms of the extent of their diversification to different economic sectors. Furthermore, a significant positive relationship exists between economic sector loan diversification and loan portfolio returns. However, similar results were not found for loan type diversification. 2017 Journal Article http://hdl.handle.net/20.500.11937/54310 De La Salle University Press restricted |
| spellingShingle | Atahau, A. Cronje, Tom Does diversification lead to better loan portfolio returns? Empirical evidence from Indonesian banks |
| title | Does diversification lead to better loan portfolio returns? Empirical evidence from Indonesian banks |
| title_full | Does diversification lead to better loan portfolio returns? Empirical evidence from Indonesian banks |
| title_fullStr | Does diversification lead to better loan portfolio returns? Empirical evidence from Indonesian banks |
| title_full_unstemmed | Does diversification lead to better loan portfolio returns? Empirical evidence from Indonesian banks |
| title_short | Does diversification lead to better loan portfolio returns? Empirical evidence from Indonesian banks |
| title_sort | does diversification lead to better loan portfolio returns? empirical evidence from indonesian banks |
| url | http://hdl.handle.net/20.500.11937/54310 |